Knowing your client – Factors Western

August 7, 2018 by EnergyNow Media

One of the most important, and overlooked aspects for transacting business is knowing and understanding your client. For example, what is the history of that prospective clients’ ability to pay your invoices if significant changes in the market occur, or with the current general economy? Do they have the cash reserve to withstand these potential circumstances? Because you depend on timely payment of your receivables, the impact of an unexpected event can be the difference in your own company’s survival. All too often the risks are overlooked due to eagerness to increase sales, or the dangling carrot of large profits. Performing proper due diligence through credit checks and references can make the difference between getting paid at the end of a project, or not at all.

Here are some of the steps you can take initially to help avoid future problems.

Use a Credit Service to obtain a credit report on the company

Have Clients submit a Credit application, with references

Contact the references, previous history of payment is important

Ask your client for some basic financial data about their company.

Know the history of your Client, or ask leading questions about past projects, ongoing work, # of employees, and perhaps the annual value of work they perform.

Make an informed business decision with the information you have collected.

OR

“Explore the Advantage” offered by Factors Western Inc., an Alberta factoring company engaged in purchasing qualified accounts receivable to help companies, like yours maintain and manage cash flow. Factors Western Inc., has been providing service to Western Canadian companies since 1985. Among the “factoring related” services offered by Factors Western is working with you to establish the credit worthiness of a potential customer. As a Factoring Company, we have access to credit information not always available to business such as yours. Utilizing a factoring service can not only benefit your cash flow, it can also give you the credit information to make the right decisions and know who you are working with. Factors Western has no additional charge to help you in assessing your client’s ability to pay, in fact we encourage our clients to call us when initially bidding on contracts in order to have a better understanding of what can be expected in so far as the potential client’s history of paying their vendors.

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